BEPS refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax. The 15 Actions developed in the context of the OECD/G20 BEPS Project, equip governments with domestic and international rules and instruments to address tax avoidance, ensuring that profits are taxed where economic activities generating the profits are performed and where value is created.

Value added tax, or VAT, is a tax on final consumption, widely implemented as the main consumption tax worldwide. It is levied on the value added at each stage of production and distribution of goods and services then passed along and ultimately paid by the end consumer. The growth in cross-border online shopping is driving increased interaction among national VAT systems. This necessitates international coordination, to address risks of non-and-double taxation that can harm both tax revenues and level playing fields between competing businesses.

Digitalisation and globalisation have transformed the global economy at a breadth and speed that has created challenges for taxation. The OECD’s work on cross-border and international taxation seeks to better coordinate tax rules within and across jurisdictions and covers projects such as the Multilateral Convention to implement Amount A, setting a global minimum tax on multinational enterprises (MNEs), analysing harmful tax practices, and developing transfer pricing rules for transactions between subsidiary companies.

The role of tax administrations is to collect the revenue that helps to pay for public spending by governments. This might include support for education, welfare, pensions, health services, transport infrastructure and defence, among many other areas. To maintain public confidence, tax systems must be seen to be fair, efficient and effective, an area where international co-operation between administrations can play an important role.

Tax crime, money laundering, and other financial crimes threaten the strategic, political, and economic interests of countries and undermine public trust in government and the financial system. If not tackled effectively, these crimes can have profound and long-lasting impacts. Combating them requires strong international co-operation to trace and locate financial flows, assets and the location and identity of criminals.

Effective taxation is vital for development. An effective tax system not only raises revenues needed for funding public services, but can also support development goals, for example by helping combat illicit financial flows, reducing inequality through redistribution and addressing health and environmental objectives by influencing taxpayer behaviour.

Taxing sources of environmental pollution and greenhouse gas emissions is an efficient and effective way to combat climate change, biodiversity loss and pollution. Environmental taxes can also contribute to revenue mobilisation and redistribution. The OECD’s data and analysis help to ensure that green taxes encourage environmentally friendly choices and support broader tax policy goals of fair and sustainable economic growth.

Tax policy seeks to strike a balance between securing the revenues needed by governments to finance their social and economic programmes and strengthening the tax system’s contributions to inclusive and sustainable economic growth. OECD’s tax policy and statistics work combines insights from empirical work, theory and practical experience to provide insights into the effectiveness and efficiency of alternative tax policy choices, as well as to analyse their impact on broader policy considerations including incentives to work, invest and innovate; income and wealth redistribution; and environmental sustainability and well-being.

In today’s globalised world, it is crucial that tax administrations work together to ensure the right amount of tax is paid to the right jurisdiction. The OECD is at the forefront of international efforts to use enhanced transparency and exchange of information to put an end to bank secrecy and fight tax evasion and avoidance.

The OECD’s work on taxation has its origins in eliminating tax barriers to cross-border trade and investment. Bilateral tax treaties are a fundamental part of the international tax architecture developed with this objective in mind. Since it was first published in 1963 the OECD Model Tax Convention has been the international benchmark for the negotiation, interpretation and application of tax treaties.